MLB Teams Are Learning
As we head up to the trade deadline, we’re seeing a shift from what has taken place in years past. Yesterday, the Braves put all-star first baseman Mark Teixeira on the block, and the collective response from MLB was to yawn. Manny Ramirez was made available over the weekend, and no one cared. The M’s are trying to create a bidding war for Jarrod Washburn, but they can’t find anyone besides the Yankees who have much interest.
This isn’t a coincidence. Multiple GMs are being quoted publicly as saying they’ve never seen prospects being valued this highly before, and that teams simply aren’t willing to give up the kind of young talent they used to in order to acquire a veteran at the deadline. Why?
MLB GMs are getting smarter, and they’re learning from recent history. Look back at the big trades made in the last year, both in season and off season.
Arizona mortgages the farm for Dan Haren, he pitches well, their team regresses anyway.
New York acquires Johan Santana, he pitches well, their team struggles regardless
Mariners acquire Erik Bedard, season goes in the toilet
Tigers acquire Miguel Cabrera and Dontrelle Willis, team underachieves
Braves acquire Mark Teixeira, are pretty much the same with him as before
Red Sox acquire Eric Gagne, he stinks
In all those deals, the team giving up significant prospects has not seen the results they were hoping for on a team wide basis. It’s not always the new acquisition’s fault (Haren’s been awesome), but one player on a 25 man roster just doesn’t make as much of a difference as most people think.
It’s taken them awhile, but the clubs themselves are finally figuring out how valuable young players are, and not buying into the “go for broke” hype anymore. Even the recent deals for C.C. Sabathia and Rich Harden were a big step back in terms of prospects received from what similar players were commanding several years ago, and more in line with what teams should be giving up for a deadline acquisition.
Slowly but surely, teams are realizing the truth – prospects aren’t some willy nilly lottery ticket that should be cashed in at the first chance to acquire a player you’ve actually heard of. Good teams build from within, and while there are trades that make sense for both teams, the crazy “my kingdom for a horse” type deals have seen their last days.
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At least the M’s are 40-65 instead of 54-51 because in that case, the front office would be trading the remainder of the farm system for Mark Teixeira, Todd Jones, and Paul Byrd.
One recent counterexample would be the Sox Beckett/Lowell acquisition. Boston gave up a lot but ended up winning the series.
(Edited to add that this trade did fall outside of the time frame given and there was a year between the trade and the Sox’s trophy.)
And, regardless of their trophy or not, I’m pretty sure the Red Sox would like to have Hanley Ramirez back right now.
I couldn’t believe there were even stories/rumors about Conor Jackson and Mark Teixiera. Jackson’s younger, waaay cheaper, and about the same hitter.
I dunno…if the team were doing any better, I get the feeling the Mariners would look at this as an opportunity, not as a lesson…
That one is the touchstone. Sox fans will tell you the title makes it worthwhile, but my mancrush on Hanley’s bat will always make me see that as a bad trade.
So, as GMs slowly learn to hang onto prospects and stop ridiculously overvaluing veterans, especially as rentals, will the M’s be the last to turn that corner? I have a painful suspicion they will.
This post provides some consolation to the fact that the Mariners stink this year. If we were having a second fluke year in a row, we’d still have Bill Bavasi, and he’d send Truinfel, Juan Ramirez, Jeff Clement & Balentien to the Braves to fill a hole at first with Texeira.
Jason!!!
in Teixeira’s case, especially for someone in the last year of his deal, who will be taken to free agency.
Dave-
Joe Sheehan argues in his most recent BP chat that things are starting to tilt too far towards the the “just take the picks” mindset — that you also have to consider the time value of getting prospects now versus getting them in 2010 (the earliest that some of the 2009 first-round draftees will hit the minors, assuming they sign late). Do you agree with that?
Don’t kid yourself, msb; I still read every word written here.
Ya.
I know the market is shifting. That said, zero interest in a bat like Dunn? I mean it’s not like Jocketty is even getting the chance to ask for the moon.
glad to hear it– hope things are just cooking for you!
heh. heh.
So what are we going to do with all these lousy horses?
The problem is, even if you were grading on a curve, the Mariners front office still gets a D/F on the “learning curve” grade scale.
YAY JMB
Some teams are learning.
I don’t think that Nady trade was so hot. The Yankees give up three minor league arms and a highly rated 19 yo having a bad half season his first year in AA for a league average OFer having a career year and reliever. One arm being a 25 yo righty with a 3-something ERA in AAA, who’s starting for the Pirates on Friday night. Meanwhile, the Yankees will have either Sidney Ponson and his 1.88 WHiP starting, or they may trade one of their cheap, young OFers for a $10 million/yr 5th starter.
I don’t think a team can continually give up on positional prospects at 22-3 and then wonder why they don’t have any capable 4th OFers when one of their vets surprisingly gets injured.
But Dave, you forget the conventional baseball wisdom that proclaims that adding a quality veteran piece inspires the other players. It shows that the front office cares about winning and enhances the positive chemical balance in the locker room.(snark)
Question: Have the M’s learned that the Bedard trade was bad because A) it was a horrible, ill-conceived idea from the start or B) it is all Bedard’s fault, and had he done what they expected, everything would have worked out just fine.
Is that on-topic?
And how come the M’s didn’t learn this lesson before the Bedard deal?
No matter what happens now, or in the future, please keep Felix.
Sure the Sox would love to have Hanley back (who wouldn’t) but if the trade is a world series ring for him, no one makes that trade to get him back. How many years of having a really bad team would you trade for 1 series victory? I’m thinking I would gladly live through 7 seasons like this one if it was preceded by a WS championship.
[Mariners]
No, but the comment stays! Yet another example of moderators abusing their powers.
Drayer last night had a great explication of just why you do not trade Beltre, ranging from his offense, defense, salary next year and clubhouse influence…
I agree with comment 19……..Please please keep Felix
Especially when the alternative for M’s fans is to live through the bad seasons anyway.
That said, I don’t think most teams should be concerned about the time value of players. Having a good player today versus having an equally good player a few years from now, doesn’t matter much for good teams that know they will be around for a long time and that they want to have a good future.
You have to try to gather as much cheap young talent as you can get…
yes, but like everything in life there is a balance. For instance, if the cost to acquire Texeira is two top draft picks then isn’t it worth it? You get the player you want and make a run at the playoffs. Tex walks in the offseason and you get two top 35 players back in the next draft. I watched Billy do this for years and wondered why others weren’t doing the same. Actually, isn’t that about what happened in the CC deal?
At least we’ll always have Ed Wade.
Yes, the time value of prospects has to be factored into the equation, but I believe that teams are actually coming close to that balance now – they’ve been out of balance for too long, and this shift moves us towards an equilibrium.
That I disagree with Joe Sheehan about this makes me feel far more confidant that my position is correct.
It’s kinda funny that all a sudden teams are all about keeping the picks they’ll gain by holding a player and losing him through free agency — after they change the rules to restrict sandwich picks to A players.
I’m betting the MLBPA is going to get that part of the CBA changed. Not sure what’s better for them, though — restoring the loss of draft picks for signing free agents or eliminating the sandwich picks.
23:
I don’t think we can use ‘clubhouse influence’ as a positive reason to keep a player we like (Beltre) when we disparage the same term in relation to players we don’t like (fill in the blank).
diderot (30)-
Beltre’s “clubhouse influence” isn’t a team chemistry thing. It is a well known fact that Beltre is something akin to an unpaid coach and guidance counselor for the younger guys in the clubhouse like Betancourt and Lopez. Someone of his skill and stature teaching other infielders the ropes in their language (Spanish, natch) is a far more valuable asset than “veteran leadership” by which we mean “he went to the playoffs once and clearly his confidence will have a trickle-down effect.”
It was kind of why I was mad about the Moyer deal a few years ago: Moyer’s experience and “little black book” of hitters he’d faced, coupled with his demeanor and respect for the tradition of the game, made him an unpaid pitching coach. We probably could have kept him around and never hired Rafael Chavez and had just as good if not better results.
Edit: I was also mad because it was a terrible, terrible deal. What are Andrew Barb and whoever else we got for Moyer doing now?
Beltre stays.
In any case, if you don’t like the mention of clubhouse influence (which I don’t think is really that significant either), then you keep Beltre because of the ways that we can easily measure in which he is a very good value for the dollar.
The M’s dealt Moyer because he wanted to play for a contender. There were real questions about whether he was going to retire or not in 2006.
Bavasi/Lincoln did it out of courtesy to him. To expect we’d get some top-of-the-line PTBNL back misses the reality of why he was traded in the first place.
Any sign of improvement in either of them you’d care to attribute to AB? Far as I can tell they are getting worse, not better.
I agree that the market is starting to value prospects more highly. It may take a couple of years but it will be interesting to see if the pendulum swings too far. I thought that the Braves were on to something last year as they seemed to buck the trend a bit with the Teixeira and Dotel trades but they didn’t work out so well.
Jackson is, of course, both younger (by two years) and much cheaper (by a LOT), but he is not “about the same hitter.” Tex is a .290/.380/.525 true talent hitter, Jackson is .290/.375/.465 (those are their current Marcels). Tex has significantly more power, and Jackson is the one that plays in the hitters park.
Now, I don’t disagree with the sentiment that a Jackson/Tex swap is a bad idea for the D’backs. But there is a big difference between the two as hitters (and maybe fielders, I don’t know), on the order of ~60 points of OPS.
From an MLBPA view, they want compensation for free agents eliminated: by even fractionally lowering the desirability of free agents they reduce the amount of money free agents get, and that’s the #1 through #n priority for the union.
I think all the other GMs can thank the BullDozer for being a cautionary tale.
31:
don’t get me wrong–I would hate to see Beltre go.
But as smb points out, I’m not sure even he would want any responsibility for the ‘development’ of younger players on the team.
So is the next step in the learning curve that teams will no longer throw huge amounts of money at players like Zito, Schmitt, Hampton, Silva, Sexson, Delgado, Batista & Washburn? Have most teams already made that adjustment – meaning that only a few teams, including the Mariners, are still throwing huge money at veterans in free agency?
I expect that this offseason, Ibanez, Teixeira, Sabathia, Sheets and others might be surprised by what offers they are getting because the teams know they’ll lose picks in addition to signing the player. I think the price has to drop as smart teams lock up their young players like Longoria this year and Bonderman a few years back, it becomes even more important to grow from within as fewer good players reach free agency in their primes.
FWIW ESPN’s Jayson Stark says he now doesn’t think the Washburn trade will happen, that Seattle is demanding too much and the mood is souring.
The teams may be learning, but the bloggers aren’t…
http://theropolitans.com/2008/07/trade-for-manny-ramirez-at-all-costs.html
I expect that this offseason, Ibanez, Teixeira, Sabathia, Sheets and others might be surprised by what offers they are getting because the teams know they’ll lose picks in addition to signing the player.
It depends. If you’re a team that doesn’t care about the slotting system MLB hopes and prays that teams adhere to when signing picks, the loss of an early draft pick is less meaningful. A Boston or a Detroit, for example, could sign one of those guys and pick up top talents who drop because of signability issues. Pony up the cash, sign a couple of those guys, and you make out OK even without that first-rounder.
And if you’re a crappy team and pick in the top 15, you keep your first-rounder in any case and lose your next highest pick instead.
Losing a pick is never a tremendous thrill, but it hurts some teams more than others.
[metacommentary; you're entitled to your opinion but this isn't the place to discuss it]
Another aspect of this new-found intelligence (as Dave has touched on previous posts) is the new enthusiasm teams have for signing their hot prospects to good contracts before they reach free agency, buying out some of their arbitration and/or FA years. The players get an early payday and stability; the teams get talent at below-FA rates and salary stability (and it probably pays off indirectly in marketing and fan loyalty, since the young stars-in-the-making promise to be around for a while).
Naturally, the M’s have so failed to learn this lesson either. (Of course they tried, but since their talent evaluation sucks they locked up Betancourt and Lopez). And a side-effect of teams locking up their young stars is that the offseason free agent pool is getting thinner and thinner, meaning a team that has made itself reliant on that pool by gutting its farm system has an even harder time rebuilding.
And how come the M’s didn’t learn this lesson before the Bedard deal?
We’ve yet to see any evidence they’ve learned it after the deal either. (As Tek #17 says, it’s very possible their take-away from that will be that Bedard sucks but the deal was still a good idea). The M’s have been consistently slow to learn the lessons of modern roster construction, despite having one of its leading practitioners as a division rival for a decade now. It’s been abundantly evident that the M’s saw no need to change the way they were doing things as long as fans showed up, the broadcast networks paid, and the profits rolled in. It’s only when the product they are putting on the field is so bad that it threatens the business that they’re forced to rethink anything — and that might be the only silver lining in this disaster of a season.
Of course “rethinking” is an act that isn’t guaranteed to lead to the right thoughts, or the right outcome, particularly if the same guys are doing the same rethinking using the out-dated facts they think they know. They could rethink themselves right into Bavasi 2.0.
The teams may be learning, but the bloggers aren’t…
The great thing about the internet is that anybody can be a blogger.
(Who would’ve hired Derek and Dave all those years ago?)
The terrible thing about the internet is that anybody can be a blogger.
(The best thing we can do: don’t link to these people)
Isn’t that comment a little results-based? I thought, at the time, the tenor around the blogospehere was that it was a good idea.
What I’m afraid of is that Mariners top brass will look at this and buying out arbitrations years of young, promising players is a bad idea and never do it again (and possibly nickel and dime ‘em like they did with Freddy Garcia….).
If the Mariners are commanding such a high price for Washburn, that probably means that they haven’t learned their lesson. They probably think that the reason the Bedard trade was stupid is that Bedard is a whimp and that it is all his fault.
But then again, it might just be that HowChuck put handcuffs on Pelekoudas and won’t let him trade anybody for anything less thatn a king’s ransom.
I think we’ll see what the orginizations new (or unchanged) philoshophy is by who they hire as a GM.
In his autobiography, Marvin Miller said that the reason the whole “Type A” etc. free agent system is as it is is because the union didn’t care how they calculated it, and in fact having a really stupid system (making Raul into a Type A free agent, e.g.) would help the system wither and die when the owners realized its absurdity. Of course, the learning curve with the owners is very, very steep.
It is interesting how we’ve gone from “Ohmigod, the Mariners got so little for Randy Johnson” (which is exactly what was said in the mainstream media on July 31, 1998) to “there will never be a trade for a rent-a-player anywhere near the value the Mariners got for Randy Johnson” in a decade.
[feedback about moderation should be by email]
My main thought was not: “Why would the Mariners want to trade away Beltre when he’s one of only two bonafide good position players on the roster?”, but, “What the heck do the Rays want with him since they already have Longoria?”
At what point then do prospects become overvalued or inefficient?
I don’t think it’s just HowChuck….it may be more, and larger parts of the organization, with more mid and upper level management thinking Washburn is more valuable than he is.
This is the only moderation discussion that I’m going to have in this comment thread, but I didn’t delete your comment. I didn’t even read it. For some odd reason, whenever someone gets angry about their comment being deleted, they assume it was me!
But disputing moderation decisions in-thread isn’t going to generate any sympathy for your cause; send the authors an email if you think it should’ve been handled differently.
(this assumes you are being serious; if you’re making a joke I apologize, not doing so well at reading tone today)
It is unfortunate for us in the Northwest that the M’s are one of the last teams to learn their lesson, while the A’s took advantage just prior to this renaissance.
I think it sometimes make sense to give up long term goals for short term gain, ala the BoSox/Marlins deal. But I agree with the sentiment that there was a general imbalance before.
——–
Since the Mariners already committed to the old way, what should they do? They’ve still got a year of Bedard and Beltre left. Ichiro isn’t getting any younger. Restocking the farm could take a while.
this was in default of Carlos Garcia leaving last year; Garcia was apparently the self-appointed butt-kicker & mentor, and as their infield coach had some leverage. I doubt Beltre has much leverage beyond the respect other players have for him ….
Monument to Baseball Efficiency vs Bill Bavasi
Result? Everybody Loses
Somebody please tell me there’s hope on the horizon…
At what point then do prospects become overvalued or inefficient?
This is actually a really interesting question, and I think the answer is: Never, at least as long as the structural imbalances created by the service time and league minimum/maximum salary rules remain in place. If the MLBPA ever gets those thrown out, so that everybody is a free agent from the start, we could eventually see the young guys getting overpaid compared to the old guys, but I doubt that’s going to happen — it’s the old guys who run the MLBPA, after all. (I’d personally like to see Charlie Finley’s idea of all contracts lasting no longer than one year — not because it’s necessarily a good idea, but just because I think it would be an interesting experiment. Would suck for fans who grow attached to players, of course.)
I think we’ll see what the orginizations new (or unchanged) philoshophy is by who they hire as a GM.
I’m actually starting to bet that they’re going to hire Pat Gillick to replace Armstrong (who will move up or aside), and he’ll then turn around and hire one of the Usual Suspects as GM.
(Aside: Did you know the Firefox browser has a built-in spellchecker that would’ve caught both misspellings in that sentence? I’m a lousy speller, and it saves me all the time.)
If anyone doubts this, compare the C.C. Sabathia trade with the Bartolo Colon trade. The prospects Montreal gave up to get Colon would buy an entire team now.
As much as this trend is going to kill the M’s this trading deadline and off season, overall, it’s a good trend for baseball.
I approve.
ummm..or not. Kotchman for Tex deal just about done according to ESPN.
Seems to be confirmed, Kotchman and a minor league pitcher (one who’s pretty borderline at that, at least to my knowledge) for Tex.
Great, this means that now he’ll cream us the rest of the year, and the FO will see that as a reason for him to play here…
“Mark Teixeira on the block, and the collective response from MLB was to yawn.”
Hardly… it looks like the Braves got a really good return for him.
Maybe you should wait to post columns like this until after the trade deadline passes…
Here is a link:
http://www.rotoworld.com/content/playerpages/player_main.aspx?sport=MLB&hl=245308&id=3329
Seth in #42 notes in reference to Mets bloggers demanding a trade for Manny that “The teams may be learning, but the bloggers aren’t…“, however Manny is a terrible example for this. The Mets would be foolish to trade for him… only because they are already 3rd in the league in offense, and Manny is a subpar defender that would increase their runs allowed. Besides, there is zero chance the Sox would trade Manny; they have a good shot at the playoffs this year, and the top 6 of their lineup is probably the best in baseball. They will let him walk in November with little compensation if it means they don’t hurt their chances this year.
But the idea of trading for a rent-a-player is not some ill-conceived “conventional wisdom” that teams have finally wised up to. I think it’s more a case that the competitiveness of the field has lessened the value of the rent-a-player in the last 13 years. With three divisions and the Wild Card, and thus more chances to get in, there are right now still more than half the teams in the majors with a reasonable “one good streak away” chance at making the playoffs, i.e. 7 or so games back in their division or the WC. This kind of parity will severely dampen the fire sale/urgent buy mentality, unlike a two division/LCS only format where the playoff hunt is pretty much over for most teams by the trade deadline.
The Sabathia trade is looking like a winner for the Brewers right now; he’s been giving them insanely good, innings-eating starts from day one. The Brewers haven’t seen the playoffs since 1982; now, they are poised to be the wild-card or even division winner. Most teams realize that the playoffs are not a guarantee. If you get close, and have a real and legitimate- not just mathematical- chance at the postseason you need to take it; another solid chance might be a few years away. But there’s more parity in the game than in the two-division format, and as such teams know they could be in the playoff hunt sooner rather than later. That is what is making the prospects seem more valuable than before.
The 2007 WS was easily worth giving up even a Hanley Ramirez type player for a top notch third baseman and true #1 starter, although obviously Boston would love to still have Ramirez in at short, their only weak position in the field. The Red Sox don’t make too many deals that deplete the farm system for a quick fix, and when they do it seems to pay off.
The Mariners mistake is in doing “stretch run” deals… in November… every single year.
I thought the point of Dave’s post was that teams aren’t trading a handful of prospects for one guy. The Angels traded a starter and a prospect for a better starter. Doesn’t that kind of validate was Dave was saying?
My guess is that the Angels will try to ink Teixeira to a long-term deal.
Kotchman is under team control through 2011. He is also only 25 years old. Yes, he is a starter .. but still has an upside(kind of like a what a prospect is, huh?). I don’t know much about Stephen Marek other than the fact that I’ve seen reports of him being one of the better prospects in the Angels’ farm system… and that he seems to strike out a lot of guys in relief.
FWIW, Rosenthal earlier today was saying they’d do the deal with Kotchman + if the trade was Tex +
and his update, pointing out that if they lose Tex, they have two draft picks and Kendry Morales in the wings.
I feel bad for Casey Kotchman… it must suck to go from a winner to a loser…
Teixeira is only *28*. He has a career OPS+ of 132. Yes, the contract is going to be a bear, but obviously if they want to the Angels can afford it. They gave up a 25-year old starter at the same position (whose career OPS+ is 101) and a pitching prospect. I’m still not sure how you could argue this is even close to the Haren or Bedard packages, or any other” multiple prospects for one guy” type of deal..
This is definitely NOT a “kingdom for a horse” type of deal.
When did I argue that this is close to the Haren or Bedard packages? All I said was the Braves got a pretty good return for someone that they were not going to resign. Also, the prospect that they would have got if they lost him to free agency probably wouldn’t have come close to what they got in this trade.
Should the Angels have done this? Sure! If I were them I’d certainly do it. They are in great shape to win the World Series now.
However, if I were the Braves, would I be happy? Absolutely!
I just commented on the one line where Dave said “the Braves put all-star first baseman Mark Teixeira on the block, and the collective response from MLB was to yawn” because that is not true. As for the other thing I said.. we are still 2 days away from the trading deadline. Who knows what will actually happen. Sure, maybe it is not the same as it was a few years ago .. as far as the prospects that people were willing to trade. I just think the Braves got good value for a player they would not be able to keep .. and that this post was a little premature because we haven’t seen what deadline deals will actually be made.
If you had elaborated like you just did in your first post, I probably wouldn’t even have commented. But that you ended it with this.
I thought that was pretty snarky, so if it wasn’t meant so, then sorry, my Bavasi.
The Braves traded five players, including their top prospects, to get Teixeira. When dealing him away, they got back only two players (one decent big leaguer and one middling prospect).
The Mariners traded five players for Erik Bedard, and I’d say the value they gave up was close to what the Braves traded for Teixeira. When the Mariners trade Bedard, they will get back…
74: Hopefully two draft picks.
I have to assume the Braves see something in Merek, and they have a pretty good track record at evaluating pitching (and maximizing what they have), because he’s what is supposed to make up the difference in talent between Kotchman and Teixeira (or between Kotchman and two draft picks).
(And you should probably just ignore walkie83, just as you would any other troll with an agenda)
yet another one called by these guys… no worries though – all us bloggers are, and the guys who take the time to run the sites, are just posters who voice their opinion only – we aren’t much smarter at all than any other poster on any site at any given time – no matter what some may think of themselves.
Not that you should believe everything you hear from Rosenthal…
Two teams that inquired about Mariners reliever J.J. Putz were told that he would not be traded. But others say that Putz indeed is available, along with every player on the M’s roster except for right fielder Ichiro Suzuki, right-hander Felix Hernandez, catcher Kenji Johjima and reliever Brandon Morrow.
Granted that quote is pretty convoluted, but Kenji is “not available”?
and Olney points out on ESPN that the Angels weren’t really looking to get into the Tex sweepstakes until the Braves price dropped dramatically when they realized not many teams were interested….
Kenji being “not available” in trade makes sense in the same way that Kenji’s extension does.
The Braves pick up three years of arbitration eligible Kotchman (a good, not great player who will no longer be cheap) in exchange for the best hitter on the market. If you can’t see how that’s a huge step back from what teams were paying a year or two ago, I don’t know what to say.
nope. or, rather, yup.
I’d say the Dbacks have done a decent job of building within despite selling most of the farm for Haren(who they are in talks with on an extension right now).
Out of the current 25 man roster 14 are home grown, and 10 of those are 26 or younger. They’re also going to have at least 3, with possibly as many as 7, of the first 75 picks or so in the next draft. So I they could potentially rebuild the system rather quickly.
57 (joser):
Thanks for the reply…it’s a question I’ve been wrestling with. I disagree with your assertion though. Whilst prospects and players with limited service time are definitely undervalued (at least by Bavasi and his ilk), I do think there comes a point when the value of trading for a guy like Teixeira does outweigh the costs in prospects. Part of the equation is really hard to figure because for every Colon or Slocumb trade, there are many, many other trades of much hyped 21 year olds who really have a good chance of turning 30 rather than turning into even bench players. And while this is obvious, what value can be placed on Triunfel or Balentien or Aumont, dollar wise?
It seems to me that if the pendulum is swinging in the direction of favoring prospects, then there should be a point where prospects are in fact overvalued, almost by definition. Where that point is or how to calculate it, I have no idea.
You basically just have to figure out the risks involved in that prospect developing and weigh that against the benefit that would be received if the player does develop.
So, let’s say there’s a 20% chance that Carlos Triunfel turns into CARLOS TRIUNFEL, a .300/.350/.500 second baseman. If you figure that having that guy under contract for six years at below market rates is worth (and I’m making this figure up) $70 million compared to what he’d cost on the free market, than Triunfel’s value is 20% of $70 million, or $14 million.
Now, this is obviously a ridiculously overstated example, because I’m only presenting two possibilities (he’s awesome or he has no value at all) and ignoring everything in between, while in actuality, there are many more shades of gray. But the process is the same – you figure out what the aggregate value opportunity of a prospect is, then divide the risks, and you get a net present value.
There’s certainly a point where it could swing too far in favor of prospects. We’re not there, though.